Globe net income rises 4% to P3.8 B as revenues dip to P31 B » Manila Bulletin Business

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Globe net income rises 4% to P3.8 B as revenues dip to P31 B


By Emmie V. Abadilla


With continued growth in both mobile and broadband subscribers for the first quarter, Globe Telecom, Inc. hauled in consolidated service revenues of P31.1 billion, 4 percent higher than the same period in 2016.

But higher interest expenses and depreciation piled on top of charges related to telco assets bought from San Miguel Corp. (SMC) pulled down Globe’s net earnings 13 percent to P3.8 billion.

Globe’s core net income, which excludes the impact of non-recurring charges, foreign exchange and mark-to-market charges, likewise dipped 12% year-on-year to P3.7 billion.

Meanwhile the telco’s Board of Directors yesterday approved the second quarterly distribution of cash dividends worth P22.75 per share, payable on June 7, 2017 to stockholders on record as of May 23, 2017.

The second quarter cash dividend payment total is about P3.0 billion.

On the same date, the Board of Directors of Globe approved the declaration of the second semiannual cash dividend for holders of its non-voting preferred shares on record as of August 10, 2017, payable on August 22, 2017.

The amount of the cash dividend shall be at a fixed rate of 5.2006% per annum calculated in respect of each share by reference to the offer price of P500.00 per share on a 30/360 day basis for the six-month dividend period.

“Despite the temporary setback on profits, we are seeing encouraging improvements this quarter,” remarked Globe President and CEO Ernest L. Cu. “We continue to lay down the foundation to secure sustainable growth in the future.”

Even amidst intense competition, mobile service revenues, which accounted for 76% of Globe’s consolidated service revenues during the first three months of 2017, rose to R23.8 billion, up 3%.

And although mobile voice revenues, which accounted for 33% of total mobile service revenues, decreased 3% to P7.9  billion as voice traffic shifted to internet-based applications, the telco posted 8 per cent revenue growth in mobile data and 3 per cent higher SMS revenues.

Mobile SMS, which accounted for 25% of total mobile service revenues, grew 3% to P5.9 billion.

Mobile data, the biggest contributor to mobile business, accounted for 42% of total mobile service revenues as more Filipinos adopt the digital lifestyle. As of end-March 2017 mobile data revenues stood close to P10.0 billion, up 8%.

Globe’s home broadband business likewise showed consistent growth year-on-year, registering a P3.8 billion revenues, up 9%  while its corporate data business improved 7% to P2.5 billion.

However, beginning first quarter this year, Globe changed how it reports the number of prepaid subscribers, excluding those who do not reload within 90 days of the second expiry period versus the previous cut-off of 120 days.

So far, its total mobile subscriber base increased 2 per cent to 58.6 million but churn rates shot up after the basis for reporting subscribers changed, resulting in a net reduction of 4.2 million subscribers versus 1.1 million net incremental subscribers in 2016.

As of the end March 2017, Globe Postpaid had 2.5 million subscribers, down by 4%. Prepaid gross acquisitions grew by 18% year-on-year reaching 6.5 million acquisitions.

Due to the shift in subscriber recognition, churn rates for the quarter increased further, resulting in the loss of 1.8 million subscribers versus last year’s net reduction of 463 thousand subscribers.

Still, total cumulative Globe Prepaid subscribers reached 26.7 million as of the end March 2016, up 5% year-on-year while TM’s cumulative subscriber base stood at 29.4 million subscribers, up 1%.

Consolidated EBITDA stood at P13.3 billion, up 2%. Operating expenses and subsidy grew by 5% year-on-year to P17.8 billion as the telco continued to invest in its data networks and support for its growing subscriber base.

Overall, Globe spent P8.6 billion in capital expenditures of which 81% was allotted for data-related initiatives. To date, the telco has a total of 35,325 base stations, with over 22,000 base stations for 4G2.

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